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The House will realise that the Banking (Special Provisions) Bill is being introduced in exceptional circumstances. The Chancellor made it clear in his statement yesterday that Northern Rock will be brought into temporary public ownership and explained the reasons for that decision. We will have the opportunity
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to discuss those exceptional circumstances, and the interests of protecting the financial stability of the banking system while protecting the interests of the taxpayer, as part of the debate on the Bill.

I want briefly to make a couple of points on the programme motion. I think that the House will understand the importance of reaching a conclusion on this Bill as quickly as possible. Shares have been suspended, and it is now in everyone’s interests for the transfer of shares to be effected as swiftly as possible to avoid any greater uncertainty or unnecessary delay for the bank, and for the bank to have clarity about its position and the way forward. Of course, we also need to set out the details for the scrutiny of the Bill and to ensure that the business motion provides for business to be extended to midnight this evening. Members have been able to table amendments since yesterday evening, and the amendments that are selected will be taken during the Bill’s Committee stage this evening. I commend the motion to the House.

3.44 pm

Mr. Philip Hammond (Runnymede and Weybridge) (Con): Time is limited, or at least it will be if this motion is passed, and I do not want to turn the debate on the motion into a substantive discussion of the issues before the House. However, I must place on record our view that nationalisation is not the way forward and that the Bill is, therefore, not the best use of the legislative time available to us today.

We have always made it clear that if the Government introduced an emergency Northern Rock nationalisation Bill, we would oppose it in principle and seek to amend it where necessary, but would accept a timetabling of the process. We expected, and I believe that the country expected, a specific Northern Rock Bill: a narrowly focused, substantive measure specific to the case that consisted of a few clauses and could be effectively scrutinised in a day. Nothing prepared us for this 24-page Bill of 17 clauses and two schedules, which includes quite complex provisions of wide general applicability.

The Bill is not a measure targeted at dealing with Northern Rock, but one that allows nationalisation of other deposit takers—not only banks, but also mutual building societies. If we are asked to set aside our procedures for a specific emergency, the resulting measures must be targeted at that emergency. They must be concise, relevant and clearly necessary to the resolution of the problem in hand. Of course, we understand that it would be convenient for the Government to have legislation on the shelf to cover any future bank problem, but such standing legislative powers are for another day, with proper consultation and proper scrutiny. We cannot casually hand over to the Government a blanket power to nationalise banking institutions. If such a power is needed in a specific case, the Government must come to this House of Commons and justify it on a case-by-case basis.

Over the past couple of days, we have heard many references to the Rolls-Royce nationalisation by a Conservative Government in 1971. The legislation to nationalise Rolls-Royce consisted of a two-clause Bill, which was read for the first time on 8 February 1971 and given its Third Reading on 11 February 1971. The decision to act in that case was made expeditiously, the
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legislation was concise and focused on the specific case in hand, and Parliament was able to scrutinise it properly—all very different from the present case.

Indeed, one might ask, “Where’s the fire?” The problems at Northern Rock have been with us since September. The Chancellor has had a fairly laid-back attitude to the passage of time. He originally told us that the fate of the bank would be clear by Christmas, then he came back to us before Christmas and told us that it would be clear by the New Year. Here we are in February, and apparently there is now a pressing need to do everything in one day. Why? The shares are suspended. Depositors are able to operate their accounts normally. There are no queues around the block at Northern Rock branches. There is no threat to the stability of the UK financial system; the damage has already been done. In fact, there is no fire.

The Government have produced a relatively long Bill for an emergency measure, of general application, with a procedure by which the specific provisions, including very important ones, are in a draft order that is unamendable and, if the Bill is passed unaltered, is subject to the negative resolution procedure only. I ask the Chief Secretary for at least an assurance today—now will do, if she would like to intervene—that regardless of whether the Bill is amended, either here or in the other place, the Government will allow a full day’s debate on the orders when they are laid, on the Floor of the House, in Government time. It would be an outrage if the detailed arrangements for the sequestration of private property, for the compensation of those who lost out as a result of that sequestration and for the transfer to the taxpayer of a contingent liability of approximately £110 billion were considered in just 90 minutes on a damp Tuesday morning along the corridor upstairs.

The melodramatic timetable has already created practical difficulties with drafting and tabling amendments, which we have had to do without hearing the Chancellor’s presentation of the detailed rationale for the individual clauses. Outside bodies have had no opportunity to give their input to Opposition parties on the principles or, indeed, the drafting.

We now face a Second Reading debate of probably no more than three hours and a Committee stage of, at most, two and a half hours to consider a Bill that transfers liabilities of £110 billion to the taxpayer. That is about £650 a minute of Committee scrutiny—a rate of pay that would make even Ron Sandler’s eyes water.

The result will be that even the few amendments that the Opposition have tabled will not all be debated, the vast majority of the Bill will not receive line-by-line scrutiny and, once again, it will be their lordships or, more probably—given the time constraints in the other place—the courts that have to deal with the inadequacies, imperfections, drafting errors and omissions that we shall inevitably miss during the travesty of a scrutiny process.

Mr. William Cash (Stone) (Con): Has my hon. Friend noticed that clause 2 contains a specific provision to exclude the courts when it appears appropriate to the Treasury to make such orders? In other words, the Government are trying to bypass the courts, too.


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Mr. Hammond: My hon. Friend makes a good point. I am sure that he will elaborate on it in the debate.

We do not support the proposed nationalisation, but, if it is to happen, we want to ensure that the legislation is workable and as fair as possible; that Northern Rock will be managed without political interference; and that competition in the market will not be distorted. We want to ensure that the process is open and transparent and that Parliament is properly informed of the progress of the company in public ownership.

If the Government had those interests at heart, they would have done in their draft what we must now try to do through amendments: turn their warm assurances on arm’s-length management, lack of political interference—a commitment that was made yesterday and broken within the hour by the appointment of Tom Scholar to the board of Northern Rock—and unfair competition into binding legislative constraints.

We are willing to work through the night tonight to ensure a proper Committee stage. We are happy to sit on Friday to deal properly with Lords amendments. However, an “emergency” apparently occurs only when it suits the Government to override parliamentary procedure, not when it risks Labour Members having to do a bit of a nightshift.

We signalled our willingness to co-operate on a timetabled passage of a Northern Rock nationalisation Bill. We did not—and, in conscience, could not—acquiesce in the procedure for a Bill of extended duration and broad application. Twenty-four clauses and two schedules cannot properly be scrutinised in this House in the time proposed. Inevitably, the burden will fall on the other place. That means that Lords amendments are likely to be tabled, which, again, cannot be scrutinised by this House in the single hour allotted for that purpose.

Taken together, the length of the Bill, its broad definition and the inadequacy of the time provided make the motion unacceptable. On the basis that the Government have our word that, if the business motion is defeated, we will not delay Third Reading in this House beyond 6 am tomorrow morning, and that we will deal with any Lords amendments returned to this House during the course of Thursday night and Friday morning, I urge my hon. Friends to vote against the motion.

3.53 pm

Simon Hughes (North Southwark and Bermondsey) (LD): As the House knows, my colleagues and I support the Bill because it was our idea in the first place. We argued some months ago that the House should have discussed such a measure. There is a debate about whether it could have been more narrowly focused; we understand that the argument is as much about parliamentary procedure as anything else. It would be better if the measure dealt only with Northern Rock, but I understand why it is probably procedurally necessary to have such a Public Bill, which does not suffer from the hybridity problems that could delay it here longer.

However, if we are to have this Bill, it must be properly debated, as I made clear yesterday. It is just not reasonable to ask the House to deal with everything today: Second Reading to debate the principle, the
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Committee stage to consider amendments—people may have thought of them already or decide that they are appropriate when they have heard the main debate—then Report and Third Reading. It would be entirely possible, as well as compatible with what the Chief Secretary rightly said and we agree with—the Bill should be passed into law by the end of this working week, so that there is an end to the uncertainty and paralysis of Northern Rock—for us to give the Bill proper scrutiny. This House is regularly bounced into timetables on legislation that are not justified by the facts. It is quite possible to have an agreed programme for the Bill that would clear its stages in the House tomorrow, allow it to go to the Lords tomorrow and Thursday, and allow us to deal with it later, without the programme motion before us, as I made clear to the Leader of the House yesterday.

I have two final points. First, the Lords will certainly have amendments; it is not conceivable that on a Bill of such breadth there will not be amendments later in the week. That means that there will rightly be further work for the House of Commons to do. Therefore, it is further nonsense that we are giving ourselves just one hour to deal with any arguments that may emerge in the House of Lords, any of the points made and not answered, and any of the commentary made by the informed press, the City, the financial world, the shareholders, and people in the north-east and elsewhere. To think that we can do that work, with any amendments from the Lords dealt with, in one hour on Thursday is treating the House just disgracefully.

I ask the Chief Secretary, the Chancellor and the Leader of the House to respond to the mood not only on the Liberal Democrat Benches, but in all parts of the House. If we are going to take the business under the national umbrella, as we now have to, and ensure that the shareholders, investors, future investors and above all the taxpayer have a properly secured measure, the Bill may be allowed to go through, but not on this timetable. I hope that colleagues in all parts of the House will say no to the timetable and give this place a proper chance to debate the Bill.

3.57 pm

Mr. Richard Shepherd (Aldridge-Brownhills) (Con): I support my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) and some of the comments of the hon. Member for North Southwark and Bermondsey (Simon Hughes).

This is truly a dreadful programme motion. It is consonant with all that the Government are about, and the nearest thing I can think of—the risible equivalent—is the Dangerous Dogs Act 1989, which served the then Conservative Government so well in the ’80s. No case has been made that there is such a national emergency that we need the suspension of Standing Orders and the imposition of an intolerable guillotine by the Government on the House, by majority, to consider a matter of considerable national importance. Five months they have had to come to a determination; they now insist, according to their motion, that the House dispose of the business in about five and a half hours.

The other point, which has already been made, is the consideration of their lordships, if they make amendments.
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We now treat ourselves with contempt, when they have double the time in the House of Lords to consider such an important issue that touches on our national honour and that has brought this country’s management of its financial affairs into some disrepute in the world. The Chancellor well knows this, the Treasury well knows it, and we well know it, too. The House is therefore required to consider, in proper and effective detail, the proposals contained in the Government’s extraordinary Bill, which covers every bank in the country. No, no—this House should repudiate it.

I say this to Labour Members: it is all very well thinking that a majority is sufficient to justify the actions of the Government, but this House is increasingly becoming a place merely of announcements. We are expected to be pulled by strings and say, “Hail! Hail!” That is absurd. This is a debating chamber. This matter touches on very important issues, and the Government’s motion is a corruption of the processes that we have. If they go on like this, they will be denying legitimacy to the very measures that they seek to secure.

3.59 pm

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): Let me make it quite clear that I approve wholly of the Bill. I support the principle and the political implications behind it, because I believe that they are not only necessary, but in some measure overdue. However, it would be wrong for the House of Commons just to accept such a programme for a Bill of such complexity without registering that we should not be bounced, as the hon. Member for North Southwark and Bermondsey (Simon Hughes) put it, into accepting timetables. The House itself has limited its activities by passing rules that give us the sort of procedures that consistently and continually timetable Bills.

The privileges of the House of Commons were not easily won, and nor are they to be discarded after many hundreds of years simply because it is convenient for the Executive of any particular Government party. However, it is therefore the responsibility of every individual Member of Parliament not simply to accept whatever they are presented with. If the debate breaks down along the easy and comfortable lines of party privilege and party view, we not only underplay the role of Members of Parliament but frequently discard the implications and responsibilities associated with being Members of Parliament.

I do not think that this programme motion is defensible. It has not been properly thought out, and I think that it will prove difficult to pursue in the way that the Government want. However, my views have been activated by something much stronger and deeper. If the House of Commons consistently accepts limits on its ability to debate legislation, irrespective of the content of that legislation, on the spurious ground that it is important that we proceed in a particular number of hours and minutes, we shall be responsible for the poor quality of legislation on the statute book. The House of Commons, and not just the Government, will then be responsible for accepting second best, because we are too lazy and, if I may say so, too happily unaware of the implications of our own actions to do anything to reverse them.

The Government are wrong to pursue this timetable for a Bill that has very large implications and is quite
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complex. I regret the fact that Members of Parliament on both sides of the House now accept that they should be directed as to the times and the ways in which they debate legislation. I believe that the result will make the United Kingdom a poorer nation.

4.3 pm

Mr. John Redwood (Wokingham) (Con): I rise to speak because I see a disturbing trend: the way in which this legislation is being handled is reminiscent of how European legislation is handled— [ Interruption. ] Labour Members should listen carefully to this, because it is about Parliament, accountability and creating better legislation.

I rise to speak in defence of the Committee stage. All Members with experience in the House will know that the Committee stage provides an opportunity for Members of all parties who are interested, have experience or have been well briefed by outside interests to come to the Committee and make their contribution in order to help the Government to get the legislation right in their own terms.

Obviously, I speak as someone who disagrees with what this legislation is trying to do. However, were there to be a proper Committee stage, I and people like me would be able to join in and to try to get the words and clauses right in order to do what the Government want to do, having vented our anger on Second Reading about what they want to do. In order to have proper Committee proceedings, there has to be a gap between Second Reading and the Committee. I appreciate that in this case, the gap might have to be rather short, for reasons that Ministers have set out, but there could have been a gap so that we could have heard first, on Second Reading, what the Government were trying to achieve, after which those interested could have tried to help the Government pick their way through in Committee.

When I was a Minister putting legislation before the House—I did so relatively infrequently, because I do not think that legislation is a very good idea on many occasions—I was always very grateful for the Committee stage, and for the contributions made by some serious-minded Labour Members. I did not think that I and the draftsmen and women working for me in the Department had a monopoly on all wisdom, so it was helpful to have interested and well-briefed people making suggestions in Committee and trying to get the measure right.

As the House knows, we get only an hour and a half in Committee to debate huge chunks of constitutional treaty, and we are going to get only two and a half hours this evening, if the motion goes through, on an extremely complicated Bill that has implications for the country’s whole banking sector. I urge the Government to think again. The Committee stage is crucial. Members of Parliament need a chance to talk to people outside the House who have real expertise in these areas, and Members with expertise in their own right need the chance to marshal amendments and bring them to the Government’s attention. We need to table probing amendments to see whether the Government have got it right and we need to table amendments to help them get it right. That has not been possible in this case. Will the Government please think again?


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